Officials say plan will boost jobs, but green groups warn scheme will lead to increased air pollution

Small businesses and public facilities in one of Los Angeles’ smoggiest areas are set to receive free carbon allowances as part of a unique job-creation scheme, after the district’s air quality agency voted through the controversial proposals.

The South Coast Air Quality Management District (AQMD) last week rejected claims from environmental groups that the move would increase southern California’s smog problem, voting through the proposals by 10 to one.

Under the proposals, the AQMD will issue free pollution credits that are normally sold on the open market to essential public services and small businesses across Orange County and parts of Los Angeles, San Bernardino and Riverside counties.

It said the free credits would allow businesses and public facilities, such as police departments and water treatment plants, that emit less than four tons of air pollution a year to expand, creating up to 500,000 new jobs.

AQMD spokesman Sam Atwood said meeting green groups’ demands to issue fewer credits would have hindered economic recovery in the district, arguing that the agency’s plan “allows for some growth and at the same time allows us to meet clean-air standards”.

“We don’t have new jobs and yet the population grew, the needs grew, the problems grew. I believe this enables us to have the best of both worlds – it’s a good compromise,” board member Miguel Pulido, who voted for the plan, told Associated Press.

This is the third time since 2006 that the board has debated the issue of free pollution credits, following lawsuits from environmental groups that allege the AQMD has violated the Clean Air Act, which requires pollution credits to be enforceable, quantifiable and permanent.

Green campaigners have also alleged that the district’s tranche of emission credits has already been used up, and as such it has continued to sell bogus credits to companies allotted for public service projects.

In 2008, the AQMD’s plans to bank credits from as far back as the early 1990s were quashed by a Los Angeles County Superior Court, which said the AQMD had not given enough consideration to the potential environmental impact.

A moratorium on trading credits was subsequently imposed and duly overturned by the state legislature in 2009, following heavy lobbying from electrical utilities.

The state then passed a bill that allowed the district to establish new credits, as it did on Friday.

But environmental groups are worried that the free issuing will not end with small businesses and public bodies.

“The district is creating tons of credits for companies to emit soot,” Angela Johnson Meszaros, an attorney for several environmental and health groups, told the Los Angeles Times. “They are creating way more than they need for essential public services. Then they will give them to big business and new power plants.”